The delay in the retirement age does not compensate: we will die sooner and the state will lose money
- According to a study carried out in the Spanish State, the delay in the retirement age has negative consequences, not only for the worker himself at risk of early death, but also for the public fund: It would have a social loss valued at EUR 8,564. "It does not compensate," concluded the Fedea Foundation, which was responsible for the publication of the investigation into the Bateragune case.
Speeches and reforms to delay the retirement age have been constant in recent decades. The ageing of the population and the alleged bankruptcy of the pension system have been the main stimuli of this, although many actors have said that the future of pensions should not be influenced by it. Now, the Foundation for Applied Economics Studies (FEDEF) has published a study on other negative consequences of delaying retirement.
Researchers have concluded that the delay in the retirement age in the Spanish State increases the risk of dying earlier, which does not economically compensate the researchers.
Research has focused on a broad archive of the Social Security of those born between 1935 and 1955, and the mortality of the 1967 reform has been analyzed. Thus, "delaying one year the age of exit from the labour market significantly increases the risk of death between 60 and 69 years", they say. In addition, this risk is higher among workers linked to "closer physical, emotional and mental work".
It is estimated that the death of 0.46 years before would result in a social loss of 8,564 euros, while the tax benefit would be 5,213 euros, so the impact is negative.
The study also analyzed the economic consequences of this: "The negative impact on life expectancy is greater than the fiscal benefit," he added. In particular, taking into account the monetary value of a "quality" life year, it is estimated that if 0.46 years die, social damage of EUR 8,564 will occur, while the tax benefit would amount to EUR 5,213, so the impact is negative.
"In short, the tax savings generated by late retirement and the reduction in the duration of pension payments do not compensate for the social harm associated with the reduction of life expectancy, suggesting that the reform is not economically beneficial in the broader context of social welfare," the authors of the study of the Faith say.
For this reason, the Foundation believes that policies related to retirement should be designed "cautiously", especially among those sectors and professions with stricter working conditions, not only physical, but also emotional and mental. They also considered that "more flexible" mechanisms should be adopted to enable early retirement or access to partial retirement.
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